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Kenya's Financial Sector is Robust with 45 banks. It also has four Mobile phone service Providers with two of them having recently launched Phone money Transfer services, the other 2 having launched theirs a while back. The Consumer of the financial Services utilises it in varied ways causing in varies ways strain on the available resources and at the same time, putting stress on the operational capacities and capabilities of these facilities. Of the four Delivery channels available for banking institutions in Kenya such as ATMs, telephone-based access, internet-based access and the branch network being the means of accessing, transferring and depositing money, this study focuses on the telephoned based access which has in the recent past become very popular in the country. The study main focus was to find out the extend to which the Mobile phone money transfer is embedded as a means of money transfer in the country in addition to the existing bank money transfer services. As these services interphase with banks traditional delivery channels, the study sought to find out how the operations of Phone money transfer services has affected the operations of banking institutions. This is mainly in terms of how this service has put either a strain or push to the existing Operational Capacities and capabilities of banks which have in the past relied a lot on ATM‟s and Branch Network as the major avenue of channel Delivery. With this new Innovation, the order qualifiers and Order winners are out rightly expected to change and the study also looked at how this has been shifted.
The study found out that of the services provided by mobile phone money transfer value added services, Technology and education was found to be the most influential factor influencing money transfer services. The effects of these money transfer services were found to affect banks in a number of ways. Key among the reasons were increase in number of delivery channels i.e. capacity and flexibility, Security i.e. Operational capacity flexibility, Integration with other banks services,
Better operational design and reduction in number of bank staff as the innovation takes root and replaces the traditional bank delivery channels. Further study areas could include how security as a factor is determining the spread of the service, customer satisfaction either this innovation as a replacement to the face to face banking operations, major order winners and qualifiers for this service and how banks and phone service providers are positioning themselves to benefit from this service. The study was done in Nairobi, with 200 staff from 10 banks surveyed and a response rate of 60% with 120 respondents responding. The hypothesis of the study was found to be correct, as mobile phone money transfer services were found to have affected the operations of baking operations.